Fund Concessional Financial Support For Low-Income Countries—Responding To The Pandemic

International Monetary Fund

No 2021/053, IMF Policy Papers from International Monetary Fund

Abstract: This paper proposes a package of policy reforms and a funding strategy to ensure that the Fund has the capacity to respond flexibly to LICs’ needs during the pandemic and recovery. The key policy reforms proposed include: • raising the normal annual/cumulative limits on access to PRGT resources to 145/435 percent of quota, the same thresholds for normal access in the GRA; • eliminating the hard limits on exceptional access (EA) to PRGT resources for the poorest LICs, enabling them to obtain all financing on concessional terms if the EA criteria are met; • changes to the framework for blending concessional and non-concessional resources to make it more robust and less complex; • stronger safeguards to address concerns regarding debt sustainability and capacity to repay the Fund; and • retaining zero interest rates on PRGT loans, consistent with the established rules for setting these interest rates.

Keywords: PRGT lending; PRGT subsidization; fund financing commitment; PRGT account; PRGT resource; WB financing; COVID-19; Income; Loans; Credit; Concessional external borrowing; Global (search for similar items in EconPapers)
Pages: 155
Date: 2021-07-22
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